Domino’s inks profit-sharing deal with franchisees

The pizza chain said it will invest £20 million over three years.

Domino's Pizza Group announced it has struck a deal with its franchisees over profit sharing, bringing an end to over two years of negotiations and a long-running dispute.

In an update, the chain said it will invest £20 million over the next three years, with franchise owners agreeing to bolster the speed of new store openings. 

Compared to other locations, Domino’s said that its UK arm had struggled but claimed the deal “can begin a new era of collaboration in which the system can realise its full potential.”

The agreement also includes renewed food rebates for franchisees and store incentives, and requires franchisees to open at least 45 new stores a year over the next three years, whilst testing out new technology and store formats.

“This is an important moment for Domino's, and I'm delighted we have reached what is truly a great resolution with our franchisees,” Domino’s Pizza Group chief executive Dominic Paul said in the update. “We saw first-hand through the pandemic how, when we work together, we win together. I firmly believe that the resolution we have reached is a good one for franchisees, our people, and our shareholders.”

Mark Millar, chairman of the the Domino's Franchisee Association (DFA), added: “This framework for growth is the result of many months of discussions, and the DFA and its members are pleased to have reached an agreement that brings Domino's and its franchisees closer together and enables us to focus on a future that delivers growth for all.”

Domino's added it will continue to maximise shareholder returns through a sustainable and progressive dividend and distributing an annual allocation of surplus cash through share buybacks. 

“In FY21 we have returned £136million of surplus capital to shareholders via dividends and share buybacks and will update the market with guidance for the FY22 dividend and buyback programme at the full year results in March 2022,” it said.

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